Stark wealth gap in UK: Indian-origin people see sharp rise, Pakistanis steep decline, finds study

Representative photo

• Indian households in Britain saw significant wealth increase since 2012.
• Pakistani ethnic group experienced steep decline in wealth over the same period
• Home ownership and investments drove widening wealth gaps among ethnic groups

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Individuals from Britain’s Indian ethnic group have seen one of the sharpest rises in median household wealth over the past decade, while those of Pakistani ethnicity have experienced a steep decline, according to a new report from the London School of Economics (LSE).

The study, cited by The Times of India, found that wealth gains since 2012 have been concentrated among white British and Indian households.

At the same time, Pakistani wealth fell “markedly” and several other minority groups remained with “almost no accumulated household wealth throughout”.

The report, titled “The Ethnic Wealth Divide in the UK: Mapping Disparities Across Time, Age and Immigrant Generations”, is authored by Eleni Karagiannaki, a research fellow at LSE.

It draws on data from the UK Household Longitudinal Survey to track changes in ethnic wealth gaps across rolling 24-month periods from 2012/14 to 2021/23.

The largest gains were recorded among Indian and Asian Other groups. Median wealth rose by £93,000 for the Indian ethnic group, the report said.

It also noted a striking generational divide among Indian households, with UK-born Indians pulling further ahead. UK-born adults from the Indian group “have a clear wealth advantage” over both non-UK-born Indians and the white British group.

By contrast, wealth among individuals from the Pakistani ethnic group dropped sharply over the period, the report found. At the same time, black African, black Caribbean and Bangladeshi ethnic groups remained with “almost no accumulated household wealth throughout”.

Savings patterns show a similarly uneven picture. Adults from Pakistani, Bangladeshi, black Caribbean, and black African ethnic groups reported significantly lower savings than those from the white British, Other Asian, and Indian ethnic groups, with PIOs recording the highest levels.

More than half of adults among the Bangladeshi, Pakistani and black African groups had no savings, the report said.

The wealth divide also reflects different mobility patterns. Whilst white British, white other, and Indian individuals are more likely to move up from the bottom quartile, Pakistani and black African individuals are more vulnerable to downward mobility from the top, it said.

Home ownership and investment holdings appear to be a major driver of widening gaps. In 2012/14, adults in the white British, Indian and Asian Other groups already had higher rates of home and investment ownership compared to other groups.

By 2021/23, these gaps had widened further, the report said, as white British and Indian groups increased ownership while Bangladeshi, black Caribbean, and Pakistani groups saw sharp declines — particularly in home ownership.